Shifters
Last Wednesday I was at the University of Castilla La Mancha participating in a Conference on Diversity Management . The truth is that the level of the speakers was excellent and, as always, I left there with many ideas on what to think and write. I will gradually mature concepts and thoughts and I can make a post about it. As you know those who follow this blog, if I am invited to participate in events like this, I like to write my paper. Given that much of it was very similar to others which I have already given good account in this forum , I want to focus on a specific part of my presentation, the technology revolution, the revolution of the institutions and the revolution in traditional value system, more to say than I did there. It is a part of the business world that has always attracted me a lot and I think that is very close to my thesis. Maybe it's the missing piece to understand why the companies, if they want to meet economic goal (be profitable) should be geared to long term and manage relationships with other stakeholders to shareholders and customers.
The companies are part of a system that is society. They are agents of the same. From the point of view and simplified aseptic takes system resources, transforms with the help of other agents of that system, and sell to all participants in society. Its success depends on effectively carry out their activities, but also to behave according to a system of values \u200b\u200bshared by most of the community you live with.
Until recent decades, companies are moving in very stable environments in which way to face the uncertainty of the markets and was bringing together work environments. Aquellodio place mammoth companies like General Motors or Ford, for example, which tried to cover most of the value chain, if not all of it. Ford had up to a farm with sheep for the production of wool with which manufactured the seats of their vehicles. Thus, the processes were predictable and the result practically came given. At that time, competitors remained unchanged, customers had little voice, the technology progressed very slowly, with suppliers were adversarial relationship, based on specific trade in which the price played a role, if not the only . The commercial offer, therefore, was quite stable.
societies of the time were very homogeneous, and the concept "nation - state" remained a valid unit of analysis when studying markets. It was the era of tariffs and entry barriers, both to businesses and individuals. Immigration was a very ad hoc in those countries that had colonies, but in any case-control, and cultural diversity, therefore, was limited. Our friends in the neighborhood were very close to us. In our schools, shared desks with colleagues cut by a similar pattern from the cultural point of view. When we got home, we saw TVE-1 and TVE-2. A little later came the regional and private, but our expectations were limited, biased and "domestic", if anything this term. Societies a few decades ago were much less educated than today's. Today access to college is common in OECD countries, but has not always been so. The generation of our parents began to be lucky enough to have access to higher education, but not their parents, where people could pursue those were the least.
The consequence of all this is that hierarchical firms worked perfectly. It was enough to develop a structure that efficiently exploited the resources and expertise of each company to offer a discount (standard, of course) it was a source of success.
At a time now, several things have changed. On the one hand, the economy has globalized, and that translates into business language in which competition is global. On the other hand, we live in what Kjell Nordstrom has designated as the time of plenty. In the market there and worked around everywhere, there is excess capacity in almost every sector and the consumer is more powerful and better informed than ever. The culture has also been globalized and our societies have been internationalized, as well as our expectations. People also are more and better trained than ever. Environments, therefore, have become virulent and the company hierarchy is obsolete to compete in this new scenario. There are three levers that have brought about this change: technology, values \u200b\u200band institutions.
Before talking about how these three revolutions have reshaped cited competitive environments, it should bring up to Milton Friedman and the neo-liberal economists. In the late 70's, the major governments of the world, following the doctrines of these, deregulatory began a career in which they were removed many of the barriers to foreign trade. The economy is internationalized, which provided the funds scour the globe without any problems, offshore production facilities and allowing companies to raise revenues around the globe without wealth would be shared equally. This resulted in a significant rise of migration. They were favored by the relaxation of immigration laws in developed countries due to the falling birthrate and aging population. The result is that our private companies have changed. Our neighbors and children who attend school in our neighborhood, are diverse, they can come from anywhere in the world, and for more complex, no longer see TVE, but surfing the Internet, an open network that is global.
The Technological Revolution: The advent of the PC to homes and businesses in the decade 80's, plus the widespread use of internet has forever changed the way we work and relate. For some time this part, information flows freely, because technology moves faster than the capacity of governments seeking to legislate. The times and distances shrink, borders fade and ideas are transmitted within seconds across the world. Is the era of knowledge, a new industrial revolution, in which brains count more than your hands.
We are in a scenario in which live the free market globalization of the economy and culture, with global companies that collect a lot power as protagonists, which in turn, and paradoxically, have never been so vulnerable, because the information has been democratized. It is the era of total interactivity where all discussed, and we believe we sailed through social networks, blogs, forums, chats and internet in general. Before, when we went on vacation, we taught the photos to our friends when they stayed for dinner. Now put them on Facebook, where everyone can comment. A few years ago, when we treated badly somewhere, and we liked a movie, came out well and we had a car, we had at the bar a couple of beers. Now we are fans of compañías en las redes sociales y escribimos sobre ellas en un blog. Las consecuencias para las empresas son dos: Una, ahora son transparentes y dos, sus públicos objetivo manejan expectativas globales.
Este proceso viene produciéndose de forma paulatina desde hace ya unos años. Pongo dos ejemplos: Starbuck´s, tuvo que terminar cediendo a la presión de las ONG y 93.000 consumidores que mandaron cartas a través de internet anunciando boicots a sus establecimientos, si no reconocía la tipicidad del café de Etiopía y, por consiguiente, compraba el mismo a un precio superior al que lo estaba haciendo, lo que garantizaba la viabilidad de muchos agricultores africanos. Nike, meanwhile, saw its shares fell 51.75% when the scandal of child workers and women harassed in their plants in Indonesia and Vietnam saw the light. Took 7 years to recover from a market standpoint, as you can analyze your company website. Sales also fell significantly, but have not found reliable data to quantify. Facebook already has 600 million users, Twitter 200 million, and Google spend 750 million people per day and 130 million per month Youtube. The company is exposed and can no longer hide.
The Revolution of traditional institutions: Most likely the hand of the telecommunications revolution, we live in the past 30 years a revolution of traditional institutions that have shaped our societies. As a result, countries are no longer valid units of analysis for companies. Now the focus is on lifestyle, because our nations are not homogeneous but are composed of people from many backgrounds and with different influences.
Families have also changed. The traditional European or even American, is in crisis. Divorce rates, for example, have quotas that have never before been seen. A few days ago Miguel Bosé announced on Twitter father had been through a surrogate , something unthinkable a few decades ago. Our grandparents never would have imagined that gay marriage would be approved, nor that people could raise a family without being married. The family, as well as an economic unit, as we were taught in the race, is a school of life. This is where we inculcate values \u200b\u200band shape us as people. These changes are described, therefore, implications for society and, therefore, for companies. Both resources that captures, for audiences who are satisfied.
Political parties have also changed. And not based on ideology, but are partnerships with the various points of view according to which issue. I like to recall a phrase of Julio Anguita, saying something like "If you cover the names of the programs of the PP and the PSOE, and only their proposed legislation, would have serious problems figuring out what each party" . The lack of consistency is making parties lose credibility and are increasingly rejected, as evidenced by surveys. As suggested by Nordstrom and Ridderstrale, England, more people voted in the semifinals of Big Brother in the European parliamentary elections in 2006. The other problem with political parties is its limitation to solve global problems. This crisis has shown that governments have been unable to curb the practices of banks and companies around the world. The rules of the game and not make the leaders, but business.
companies, meanwhile, have also changed. Accumulate more power than ever, but are smaller, at least in terms of structure is concerned, throughout the twentieth century. It's logical. When companies want to cover the entire value chain, was to reduce uncertainty. In the global marketplace and information technologies, the risks are of another kind. Companies, therefore, focus on what they do best and outsource the rest. Again we return to Nike, the U.S. multinational comerciliza some products that just puts the logo, and which was not involved in its manufacture.
This business revolution is a challenge for companies in the XXI century. Relationships with suppliers are no longer a zero sum game, but rather to create spaces "win - win" in which everyone comes out strengthened. Companies are no longer closed entities to become open space where there are relations of cooperation, including with customers. At bottom this is one of the keys to IKEA: I give you good price on furniture, but you work with me mounting them. In the world of wine can also be observed. If you go to the classic Rioja bodegas, one can still find companies that own cooperage. For new wells, include this process would be very costly, so that you pass to partnerships with providers that handle different toasted barrels with the winemakers experience. But the value chain not only outsourcing but also international. Into the global free market, suppliers are sought throughout the world as customers, which involves risks and opportunities. Opportunities because they can satisfy more consumers than ever. Risks because the complexity of the market is higher and you can lose control of part of the value chain. The customer is better informed than ever and you no longer want "one size fits all" is that you now want to "taste" and "cause."
The Revolution Value Systems: A few decades ago the value system of each country was well defined, today is a rehash of rules, customs and morals in different locations. Just shop around the streets of any city to understand that this is so. Mosques coexist with churches in Europe and the United States, the costumes for the football teams are filled with players from around the world. Multinational companies can succeed in multiple markets, rather than their country of origin. Only one thing has not changed. Business success requires adaptation to the environment, not giving back to the societies in which the company operates, or what is, adapt to the values \u200b\u200bof each environment. Values \u200b\u200bthat are different from a few years ago, which have merged and have complicated answers to the eternal Pegunta that has arisen humans. Without going into what is or is not ethical, what is correct or not, the fact is that in today's world there are few simple answers and universal, valid for all societies, even for an entire society in a field urban concrete about what is right or wrong, what is right or not. I do not believe in relativism, but I have the feeling of being in the minority. All this in a world where appearances take precedence, the emotional over the rational and where spirituality loses strength rapidly.
Consequences for Business: In this scenario companies need to reinvent itself. No longer apply control mechanisms archaic hierarchical companies, nor survive the company closed in on itself and which predominates standardized mass production. The company needs new management tools, new organizational designs and understand competition, as noted by Michael Porter, should not be the best, but for being different.
Corporate Social Responsibility (CSR) as a management tool, can be key in this new scenario. First, it advocates a multi-stakeholder management, in which change strategies of confrontation by cooperation strategies with stakeholders. Second, because it puts morality at the heart of business strategy, which in some way the company plans to seek long-term sustainable business model over time. Third, because his philosophy have an important place of diversity management y la equidad, lo que sin duda es un acicate para la creatividad. Sólo a partir de la diversidad podemos formar equipos que rompan con las reglas escritas y nos permitan obtener un monopolio temporal. Por último, porque la RSC se trata de un concepto relativo, que se adapta a las circunstancias y demandas cambiantes de la sociedad, lo que obliga a la empresa a estar abierta y receptiva a lo que en aquella acontece. Debemos desterrar de una vez por toda la idea de que la RSC es filantropía o ecologismo, porque estamos ante un cambio de paradigma que debe ayudar a las organizaciones empresariales a cumplir la primera de sus responsabilidades: la económica.
Termino con una frase de Peter Druker. Dirigir una empresa es, primarily to manage people. If these have changed, companies have no choice but to reinvent.
PS: If you liked this post, I recommend reading "Funky Business Forever" by Kjell Nordstrom and Jonas Ridderstrale. I also recommend reading the article "Marketing in the network economy" by Achrol and Kotler.
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